Investigate Beneficial Ownership Register of Extractive Industries- CSOs, Media Networks Task Regulators over Infractions

Participants at the workshop.

By Ekemini Simon

Civil Society Organisations under the aegis of Accountability in Extractive Sector (AES) cluster together with media organisations have called on regulators in the extractive sector to commence investigation into infractions noticeable in the beneficial ownership register of most extractive industries.

This was part of the resolutions made at the two-day workshop held in Lagos from June 27 to 28 to train media professionals and civil society organizations (CSOs) on utilising beneficial ownership information for monitoring the utilisation of natural resources in Nigeria.

The AES cluster is anchored by the Civil Society Legislative Advocacy Centre (CISLAC).

Participants observed that several extractive industries in contravention of the provision of the Company and Allied Matters Act (CAMA) 2020 did not have their beneficial ownership information published on the Corporate Affairs Commission (CAC) portal even as some appeared active.

According to Sani Ibrahim from the Corporate Affairs Commission (CAC), for an organisation to be active on the CAC, it means the company has filed its annual returns up-to-date and has also disclosed the beneficial owners of the company.

Yet, checks on some extractive companies during the training revealed that despite the fact that some companies may have appeared to have fulfilled these demands, information on the Beneficial Ownership of these companies appeared “Nill”.

It was also discovered that several other companies in the sector remained inactive implying that they have either failed to file their Beneficial Ownership information or failed to file their annual returns or still failed to do both.

The participants agreed that for these infractions to continue, it implies that the regulators in the extractive sector are not carrying out their checks as demanded by the law.

The CSOs and Media organisations charged the Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Ministry of Petroleum, Ministry of Solid Minerals Development and the Mining Cadastre Office to undertake investigation into the companies in the extractive sector that are flouting the law on beneficial ownership disclosure and appropriate sanction meted.

It was further resolved that CSOs, the media and government agencies must closely monitor the extractive industry in order to curb Illicit Financial Flows (IFFs) and revenue leakages.

The gathering observed that while the extractive industry remains the backbone of the Nigerian economy, the country loses between $15billion – $18billion to Illicit Financial Flows (IFFs) in the Extractive Industry every year.

They noted that transparency of ownership and control of companies, partnerships, trusts and other legal entities that can hold assets and open bank accounts is critical to the ability to determine where illicit funds are moving to and who is moving them.

The organisations however commended the Nigerian government over what it described as significant progress in the implementation of  beneficial ownership transparency reforms by signing the Companies and Allied Matters (Amendment) Bill 2020 into law, the launch of an Open Central Register of Beneficial Ownership (known as the Persons with Significant Control (PSC) for disclosure of all beneficial owners of corporate entities in the country and the adoption of Beneficial Ownership Data Standard for the register on 25th May 2023.

The organisations agreed that tackling corruption and financial crimes should be seen as a multi-agency task that cannot be implemented by only one government institution. 

They explained that these institutions also need beneficial ownership information in order to efficiently handle the investigation and prosecution of those that hold ultimate responsibility in financial and economic crimes.

They added “There is need for wider public engagement on the existence of the BO register and its relevance to extractive and corporate sector transparency and accountability.

” There is a need to deepen the capacity of tax and customs authorities, policing and prosecution authorities, as well as the media on the use of the register as a veritable tool for tackling corruption and financial crimes.

“There is a need for strategic collaborations between the CAC and relevant agencies like the Federal Inland Revenue Service (FIRS), Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and the Bureau of Public Procurement (BPP) towards collective impact.

“The interoperability of data between government agencies, linked to a central procurement portal, as beneficial ownership declarations should be required of all parties entering into government contracts. 

“Expedite process of updating and rectifying beneficial ownership information that is duplicated, inaccurate and/or incomplete in the register.

Deploy an approach that clearly defines roles and responsibilities of various relevant stakeholders in defending the system or preventing misuse.”

Earlier in his opening remarks, the Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa (Rafsanjani) noted that while  legitimate corporate businesses have an integral role in national development, the involvement of Politically Exposed Persons who conceal corruptly acquired wealth through the complex networks of companies deliberately created to hide their identities has further increased the risks they pose to non-fortified economies.

He noted that it is on the above backdrop that the training is organised to strengthen and sustain the capacity of CSOs and journalists to exercise their civic responsibility towards improving natural resource governance and the fight against corruption.

Meanwhile, the workshop which was organized by the Accountability in Extractive Sector (AES) cluster, was in partnership with the Niger-Delta Open Government Partnership Observatory (NOGO) cluster and the Media Initiative for Transparency in Extractive Industries (MITEI).

The workshop is an offshoot of Strengthening Civic Advocacy and Local Engagement (SCALE) project with funding support from the United States Agency for International Development (USAID), and implemented by Palladium.

The Accountability in Extractive Sector (AES) cluster anchored by the Civil Society Legislative Advocacy Centre (CISLAC), comprises Better Community Life Initiative (BECOLIN) in Imo state; Community Conciliation and Development Initiative (CCADI) in Port-Harcourt, Rivers state; Connected Advocacy for Empowerment & Youth Development Initiative (Connected Advocacy) in Edo state; Good Governance Team (GGT) Nigeria in Abuja-FCT; Institutional and Sustainable Development Foundation (ISDF) in Abuja-FCT; International Centre for Women Empowerment and Child Development (ICWECD) in Delta state; Policy Alert in Akwa-Ibom state; Social Development Integrated Center (Social Action) in Abuja-FCT/Rivers state; Speak Out Africa Initiative in Abuja-FCT; and Support for Training and Entrepreneurship Program (STEP) in Uyo, Akwa-Ibom state.

It could also be recalled that Open Ownership a few months ago had hosted the Premier training on Beneficial Ownership, a springboard that Accountability in Extractive Sector cluster leveraged upon.